Friday, February 28, 2014

LCOE graphic for solar power


In my last post, I promised I’d update my graphic for the Levelised Cost of Electricity (LCOE).  See below (click for a larger image).  Red denotes solar thermal, blue denotes PV.  Open circles denotes projects that have been announced but not completed to my knowledge.  Filled-in circles denote completed projects.

The LCOE is expressed in US dollars at today’s exchange rates (1 March 2014) with currencies depreciated/appreciated by 1.0175 per annum for the baseline date of 1 January 2015.

I need to sound a note of caution in interpreting this graphic.  When projects are announced, the project price is also announced, and that’s the information I’ve used.  If the project is a small one, then it doesn’t matter much that the opening date for the project is different to the date at which the price is announced.  In some cases, however, the project will take a long time to complete, so it’s inconsistent to use the announced price for the project.  An example is Cerro Dominador, announced in February 2014 and not due to open until mid-2017.  The announced price is in 2014 dollars, whereas the datum on the graphic has been plotted as if the price is in deflated 2017 dollars.  So the results for Cerro Dominador look a bit better than they actually are.

Don’t allow these subtleties to obscure the overall trend, however, which is that solar power is obviously getting cheaper, both for solar thermal and for PV.


Wednesday, February 26, 2014

Cost of solar power (42)


Today I’ll run the numbers for a recently announced PV plant in La Paz, Mexico.  Stories on the plant are available here (RenewEconomy) and here (Thomson Reuters).

La Paz is the state capital of Baja California Sur and is situated on La Paz Bay at the southern end of the Baja California peninsula.  La Paz is said to be a beautiful town, with tourism playing a major part in the regional economy.

Thomson Reuters says La Paz “suffers from the pollution pumped out by the aging Punta Prieta thermoelectric plant, which uses some of the dirtiest petroleum products on earth: a mix of cheap, low-grade fuel oil and expensive high-sulfur diesel.” 

This is clearly a case that’s crying out for installation of clean solar energy. 

Thomson Reuters goes on to say that “Mexico’s energy ministry has set a target for 35 percent of the country’s energy output to come from clean sources by 2024.”  


(For international readers, I point out that Australia has a target for 41,000 TWh of its electricity generation to come from renewable sources by 2020.  When announced a few years back, it was equivalent to 20% of the national production; now with declining demand it will probably be about 25% of the national production in 2020.  It is widely believed that this target will be revised downwards in a current review by the federal government.)

Aura Solar I is Mexico’s first major installation and began operation in September 2013.  The peak output from the 100 Ha site will be 30 MW.  The project involves 132,000 solar panels from Suntech and has a total cost of USD 100 million.

So we know the cost and the peak output.  What about the annual production?  As is often the case, this figure is not readily available, so I’ll estimate it in two ways.

Thomson Reuters say the plant will involve CO2 emissions savings of 60,000 t per year.  At an emissions intensity of 0.9 t per MWhr, I make that 60,000/0.9 = 66,667 MWh per year. Alternatively we can estimate a reasonable capacity factor for fixed panels at this excellent site, say 22%, which gives annual output of 24 × 365 × 30 × 0.22 = 57,816 MWh per year.  As is usually the case, the two estimates don’t agree exactly, so I’ll use the nice round number of 60,000 MWh per year.

I’ll analyse the Levelised Cost of Electricity (LCOE) for the La Paz project using my standard assumptions:



  • there is no inflation,
  • taxation implications are neglected,  
  • projects are funded entirely by debt,  
  • all projects have the same interest rate (8%) and payback period (25 years), which means that the required rate of capital return is 9.4%,  
  • all projects have the same annual maintenance and operating costs (2% of the total project cost), and 
  • government subsidies are neglected.
For further commentary on my LCOE methodology, see posts on Real cost of coal-fired power, LEC – the accountant’s view, Cost of solar power (10) and (especially) Yet more on LEC.  Note that I am now using annual maintenance costs of 2% rather than 3% as in posts during 2011.

The results for La Paz are as follows:


Cost per peak Watt              USD 3.33/Wp
LCOE                                     USD 190/MWh


The components of the LCOE are:
Capital           {0.094 × USD 1 × 10^8 }/{60,000 MWhr} = USD 157/MWhr
O&M              {0.020 × USD 1 × 10^8 }/{60,000 MWhr} = USD 33/MWhr


By way of comparison, LCOE figures (in appropriate currency per MWh) for all projects I’ve investigated are given below.  The number in brackets is the reference to the blog post, all of which appear in my index of posts with the title “Cost of solar power ([number])”:


(2)        AUD 183 (Nyngan, Australia, PV)
(3)        EUR 503 (Olmedilla, Spain, PV, 2008)
(3)        EUR 188 (Andasol I, Spain, trough, 2009)
(4)        AUD 236 (Greenough, Australia, PV)
(5)        AUD 397 (Solar Oasis, Australia, dish, 2014?)
(6)        USD 163 (Lazio, Italy, PV)
(7)        AUD 271 (Kogan Creek, Australia, CLFR pre-heat, 2012?)
(8)        USD 228 (New Mexico, CdTe thin film PV, 2011)
(9)        EUR 200 (Ibersol, Spain, trough, 2011)
(10)      USD 231 (Ivanpah, California, tower, 2013?)
(11)      CAD 409 (Stardale, Canada, PV, 2012)
(12)      USD 290 (Blythe, California, trough, 2012?)
(13)      AUD 285 (Solar Dawn, Australia, CLFR, 2013?)
(14)      AUD 263 (Moree Solar Farm, Australia, single-axis PV, 2013?)
(15)      EUR 350 (Lieberose, Germany, thin-film PV, 2009)
(16)      EUR 300 (Gemasolar, Spain, tower, 2011)
(17)      EUR 228 (Meuro, Germany, crystalline PV, 2012)
(18)      USD 204 (Crescent Dunes, USA, tower, 2013)
(19)      AUD 316 (University of Queensland, fixed PV, 2011)
(20)      EUR 241 (Ait Baha, Morocco, 1-axis solar thermal, 2012)
(21)      EUR 227 (Shivajinagar Sakri, India, PV, 2012)
(22)      JPY 36,076 (Kagoshima, Kyushu, Japan, PV, start July 2012)
(23)      AUD 249 (NEXTDC, Port Melbourne, PV, Q2 2012)
(24)      USD 319 (Maryland Solar Farm, thin-film PV, Q4 2012)
(25)      EUR 207 (GERO Solarpark, Germany, PV, May 2012)
(26)      AUD 259 (Kamberra Winery, Australia, PV, June 2012)
(27)      EUR 105 (Calera y Chozas, PV, Q4 2012)
(28)      AUD 205 (Nyngan and Broken Hill, thin film PV, end 2014?)
(29)      AUD 342 (City of Sydney, multiple sites, PV, 2012)
(30)      AUD 281 (Uterne, PV, single-axis tracking, 2011)
(31)      JPY 31,448 (Oita, PV?, Japan, to open March 2014)
(32)      USD 342 (Shams, Abu Dhabi, trough, to open early 2013)
(34)      USD 272 (Daggett, California, designed 2010)
(35)      GBP 148 (Wymeswold, UK, PV, March 2013)
(36)      USD 139 (South Georgia, PV, June 2014)
(37)      USD 169 (Antelope Valley, CdTe Pv, end 2015)
(38)      AUD 137 (Mugga Lane, PV, mid 2014)
(39)      AUD 163 (Coree, fixed PV, Feb 2015)
(40)      AUD 298 (Ferngrove Winery, July 2013)
(41)      USD 125 (Cerro Dominador, mid 2017)
(42)      USD 190 (La Paz, PV, September 2013)





Conclusion

These LCOE numbers are good, but not the best in the world.  They are perhaps 5-10% higher than other recent big projects such as Antelope Valley (number 37) and Coree (number 39).

Over the weekend I’ll update my graphic that features all the above LCOE figures.






 


Sunday, February 16, 2014

Cost of tidal power (1)


Let’s do something different today!  Instead of analysing the cost of solar power, let’s look at the cost of tidal power. 

I’ll start with RenewEconomy’s story today about the Swansea Tidal Lagoon Project.  This was actually contributed to RenewEconomy by CleanTechnica.  The story points out the cost of the project will be $1.2 billion (presumably USD), with peak output 320 MW.

A press release from the proponents, Tidal Lagoon Power, gives more details.  This will be the largest tidal power project in the world, and will involve a 9.5 km sea wall to capture renewable energy from incoming and outgoing tides.  The output will be sufficient to power over 120,000 homes.

The press release goes on to list interesting facts including: 

Rated output                         240 MW
Annual output                      420 GWh
Design life                             120 years
Area within breakwater      11.5 km^2
Height of wall                      5-20 m
Peak tidal range                   10.5 m approx.
Average tidal range             4.1 m (neap), 8.5 m (spring)

I’ll analyse the Levelised Cost of Electricity (LCOE) for the Swansea Tidal Lagoon project using my standard assumptions (see below).  These might be unfair to the project given that the design life is 120 years, but I’d also point out that the lifetime of solar thermal projects will also be greater than the 25 years assumed below.  The assumptions are:
  • there is no inflation,
  • taxation implications are neglected,
  • projects are funded entirely by debt,
  • all projects have the same interest rate (8%) and payback period (25 years), which means that the required rate of capital return is 9.4%,
  • all projects have the same annual maintenance and operating costs (2% of the total project cost), and
  • government subsidies are neglected.
For further commentary on my LCOE methodology, see posts on Real cost of coal-fired power, LEC – the accountant’s view, Cost of solar power (10) and (especially) Yet more on LEC.  Note that I am now using annual maintenance costs of 2% rather than 3% as in posts during 2011.


The results for the Swansea Tidal Lagoon project are as follows:
Cost per peak Watt              USD 3.75/Wp (installed), USD 5.00/Wp (rated)
LCOE                                     USD 326/MWh

The components of the LCOE are:

Capital           {0.094 × USD 1.2 × 10^9 }/{420,000 MWhr} = USD 269/MWhr
O&M              {0.020 × USD 1.2 × 10^9 }/{420,000 MWhr} = USD 57/MWhr

Conclusion

These LCOE estimates are quite a lot more than (more than double!) the best LCOE figures for solar power, as you can check by looking at recent posts on this blog.  I haven’t studied wind power much, but I think the tidal LCOE would also be expensive in that regard.

I’m happy to concede that my basic assumptions need to be tweaked for tidal power, but my preliminary conclusion is that, for renewable energy in the British Isles, I think investment in wind would be preferred to investment in tidal power.

Sunday, January 12, 2014

Cost of solar power (41)


RenewEconomy today has a story about the Cerro Dominador CST plant to be built in the Antofagasta region in northern Chile.  A press release from Abengoa about the plant is available here.


Cerro Dominador will be a remarkable plant – 110 MW peak power output from a heliostat/tower configuration with dry condensers, 17.5 hours thermal storage in molten salt, and, according to BNamericas, a Capacity Factor of 95%.  By comparison, the Gemasolar plant in Spain, the best-known of the heliostat/tower plants equipped with storage, is “only” 20 MW with 15 hours storage.


BNamericas quotes the cost of the plant as USD 1.0 billion and Abengoa says the plant will avoid emissions of 643,000 t CO2 per year. 


Chile is fortunate in having major deposits of sodium nitrate, NaNO3, one of the two main components of the salt storage system.  It’s interesting that access to naturally occurring NaNO3 deposits avoids embodied CO2 emissions in the plant that would otherwise occur if the NaNO3 had to be synthesised using natural gas.


The information on the web did not explicitly state the annual power output of the system, so I’ll estimate this in two ways.


If the Capacity Factor is 95%, then the annual output will be 0.95 × 110 × 365 × 24 = 915,420 MWh.


On the other hand, if 643,000 t CO2 are avoided per year, then I estimate the power produced as 643,000/0.7 = 918,571 MWh/yr.  Here I have assumed the emissions intensity of the Chilean generation system is 0.7 t CO2 per MWh, which is reasonable, I think, since the generation capacity in Chile is (according to Wikipedia) 33% hydro, 13% oil, 30% gas and 20% coal. 


Those estimates are very close.  Let me use the figure based on Capacity Factor: 915,420 MWh/yr.


I’ll analyse the Levelised Cost of Electricity (LCOE) for the Cerro Dominador project using my standard assumptions:

 

  • there is no inflation,
  • taxation implications are neglected,
  • projects are funded entirely by debt,
  • all projects have the same interest rate (8%) and payback period (25 years), which means that the required rate of capital return is 9.4%,
  • all projects have the same annual maintenance and operating costs (2% of the total project cost), and
  • government subsidies are neglected.

 

For further commentary on my LCOE methodology, see posts on Real cost of coal-fired power, LEC – the accountant’s view, Cost of solar power (10) and (especially) Yet more on LEC.  Note that I am now using annual maintenance costs of 2% rather than 3% as in posts during 2011.

 

The results for Cerro Dominador are as follows:

 

Cost per peak Watt              USD 9.09/Wp

LCOE                                     USD 125/MWh

 

The components of the LCOE are:

Capital           {0.094 × USD 1 × 10^9 }/{915,420 MWhr} = USD 103/MWhr

O&M              {0.020 × USD 1 × 10^9 }/{915,420 MWhr} = USD 22/MWhr

 

By way of comparison, LCOE figures (in appropriate currency per MWh) for all projects I’ve investigated are given below.  The number in brackets is the reference to the blog post, all of which appear in my index of posts with the title “Cost of solar power ([number])”:

 

(2)        AUD 183 (Nyngan, Australia, PV)

(3)        EUR 503 (Olmedilla, Spain, PV, 2008)

(3)        EUR 188 (Andasol I, Spain, trough, 2009)

(4)        AUD 236 (Greenough, Australia, PV)

(5)        AUD 397 (Solar Oasis, Australia, dish, 2014?)

(6)        USD 163 (Lazio, Italy, PV)

(7)        AUD 271 (Kogan Creek, Australia, CLFR pre-heat, 2012?)

(8)        USD 228 (New Mexico, CdTe thin film PV, 2011)

(9)        EUR 200 (Ibersol, Spain, trough, 2011)

(10)      USD 231 (Ivanpah, California, tower, 2013?)

(11)      CAD 409 (Stardale, Canada, PV, 2012)

(12)      USD 290 (Blythe, California, trough, 2012?)

(13)      AUD 285 (Solar Dawn, Australia, CLFR, 2013?)

(14)      AUD 263 (Moree Solar Farm, Australia, single-axis PV, 2013?)

(15)      EUR 350 (Lieberose, Germany, thin-film PV, 2009)

(16)      EUR 300 (Gemasolar, Spain, tower, 2011)

(17)      EUR 228 (Meuro, Germany, crystalline PV, 2012)

(18)      USD 204 (Crescent Dunes, USA, tower, 2013)

(19)      AUD 316 (University of Queensland, fixed PV, 2011)

(20)      EUR 241 (Ait Baha, Morocco, 1-axis solar thermal, 2012)

(21)      EUR 227 (Shivajinagar Sakri, India, PV, 2012)

(22)      JPY 36,076 (Kagoshima, Kyushu, Japan, PV, start July 2012)

(23)      AUD 249 (NEXTDC, Port Melbourne, PV, Q2 2012)

(24)      USD 319 (Maryland Solar Farm, thin-film PV, Q4 2012)

(25)      EUR 207 (GERO Solarpark, Germany, PV, May 2012)

(26)      AUD 259 (Kamberra Winery, Australia, PV, June 2012)

(27)      EUR 105 (Calera y Chozas, PV, Q4 2012)

(28)      AUD 205 (Nyngan and Broken Hill, thin film PV, end 2014?)

(29)      AUD 342 (City of Sydney, multiple sites, PV, 2012)

(30)      AUD 281 (Uterne, PV, single-axis tracking, 2011)

(31)      JPY 31,448 (Oita, PV?, Japan, to open March 2014)

(32)      USD 342 (Shams, Abu Dhabi, trough, to open early 2013)

(34)      USD 272 (Daggett, California, designed 2010)

(35)      GBP 148 (Wymeswold, UK, PV, March 2013)

(36)      USD 139 (South Georgia, PV, June 2014)

(37)      USD 169 (Antelope Valley, CdTe Pv, end 2015)

(38)      AUD 137 (Mugga Lane, PV, mid 2014)

(39)      AUD 163 (Coree, fixed PV, Feb 2015)

(40)      AUD 298 (Ferngrove Winery, July 2013)

(41)      USD 125 (Cerro Dominador, mid 2017)

 

Conclusion

 

You can compare results in the graphic shown in my last post, which expresses costs in USD/MWh at the exchange rates of 6 December 2013.   (Currencies deflated at 1.75% per annum, baseline date is end 2014.  Red is for solar thermal, blue for PV.  Filled-in circles denote completed projects, open circles denote announced projects.)

 

According to my methodology, the LCOE for Cerro Dominador is outstanding, about one quarter of that for Gemasolar (number 16 on the list) and one third of that for Shams (number 32 on the list).  We have been hearing for some time that the cost of CST projects with storage would eventually start to fall quickly.  If the data above for Cerro Dominador is accepted, then we now have evidence for the drop in prices.


Footnote:  One other factor to be taken into account is the solar resource near Antofagasta.  A little web searching today indicates to me the resource is the best in the world.  That's probably worth a few tens of dollars per MWh.

 

Thursday, December 5, 2013

Cost of solar power (40)

It’s been a few months since I blogged about the Cost of Solar Power.  Part of the reason is that I had a holiday in China in September, which was an overwhelming experience.  I came back convinced that China is on an unstoppably huge economic trajectory, which will of course have enormous implications for us in Australia.

I’ve also been very busy with R&D on solar-powered recuperated Brayton-cycle engines, a topic that I’ll discuss on another occasion.  Some details, but not recent or confidential results, are at www.sunoba.com.au.

In Australia the domestic PV market is in a calm and modestly-growing condition now that feed-in tariff schemes of various state governments have been wound back.  But there is one segment of the market that’s growing nicely – that’s related to medium-sized PV installations on commercial buildings, especially when the electricity produced can be used within the facility during the day.  Under such circumstances, my understanding is that the installations are economically attractive.

Let’s look at the economics of a recently-announced installation on a winery in Western Australia.

In July 2013, Ferngrove Winery opened a 228 kW PV system.  According to Solar Progress, the system has 696 high-efficiency SunPower 327-Watt panels with six 39 kW German-made Kaco inverters.  The project was half-financed by the federal government’s AusIndustry Clean Technology Food and Foundries Program, which announced that the total project cost was AUD 892,780.   On their website, Ferngrove state that the project will deliver 341 MWh of electricity per year.

I’ll analyse the Levelised Cost of Electricity (LCOE) for the Ferngrove Winery project using my standard assumptions:


  • there is no inflation,
  • taxation implications are neglected,
  • projects are funded entirely by debt,
  • all projects have the same interest rate (8%) and payback period (25 years), which means that the required rate of capital return is 9.4%,
  • all projects have the same annual maintenance and operating costs (2% of the total project cost), and
  • government subsidies are neglected.

For further commentary on my LCOE methodology, see posts on Real cost of coal-fired power, LEC – the accountant’s view, Cost of solar power (10) and (especially) Yet more on LEC.  Note that I am now using annual maintenance costs of 2% rather than 3% as in posts during 2011.

The results for the Ferngrove Winery project are as follows:

Cost per peak Watt              AUD 3.92/Wp
LCOE                                     AUD 298/MWh

The components of the LCOE are:

Capital           {0.094 × AUD 892,780}/{341 MWhr} = AUD 246/MWhr
O&M              {0.020 × AUD 892,780}/{341 MWhr} = AUD 52/MWhr

 
By way of comparison, LCOE figures (in appropriate currency per MWh) for all projects I’ve investigated are given below.  The number in brackets is the reference to the blog post, all of which appear in my index of posts with the title “Cost of solar power ([number])”:

(2)        AUD 183 (Nyngan, Australia, PV)
(3)        EUR 503 (Olmedilla, Spain, PV, 2008)
(3)        EUR 188 (Andasol I, Spain, trough, 2009)
(4)        AUD 236 (Greenough, Australia, PV)
(5)        AUD 397 (Solar Oasis, Australia, dish, 2014?)
(6)        USD 163 (Lazio, Italy, PV)
(7)        AUD 271 (Kogan Creek, Australia, CLFR pre-heat, 2012?)
(8)        USD 228 (New Mexico, CdTe thin film PV, 2011)
(9)        EUR 200 (Ibersol, Spain, trough, 2011)
(10)      USD 231 (Ivanpah, California, tower, 2013?)
(11)      CAD 409 (Stardale, Canada, PV, 2012)
(12)      USD 290 (Blythe, California, trough, 2012?)
(13)      AUD 285 (Solar Dawn, Australia, CLFR, 2013?)
(14)      AUD 263 (Moree Solar Farm, Australia, single-axis PV, 2013?)
(15)      EUR 350 (Lieberose, Germany, thin-film PV, 2009)
(16)      EUR 300 (Gemasolar, Spain, tower, 2011)
(17)      EUR 228 (Meuro, Germany, crystalline PV, 2012)
(18)      USD 204 (Crescent Dunes, USA, tower, 2013)
(19)      AUD 316 (University of Queensland, fixed PV, 2011)
(20)      EUR 241 (Ait Baha, Morocco, 1-axis solar thermal, 2012)
(21)      EUR 227 (Shivajinagar Sakri, India, PV, 2012)
(22)      JPY 36,076 (Kagoshima, Kyushu, Japan, PV, start July 2012)
(23)      AUD 249 (NEXTDC, Port Melbourne, PV, Q2 2012)
(24)      USD 319 (Maryland Solar Farm, thin-film PV, Q4 2012)
(25)      EUR 207 (GERO Solarpark, Germany, PV, May 2012)
(26)      AUD 259 (Kamberra Winery, Australia, PV, June 2012)
(27)      EUR 105 (Calera y Chozas, PV, Q4 2012)
(28)      AUD 205 (Nyngan and Broken Hill, thin film PV, end 2014?)
(29)      AUD 342 (City of Sydney, multiple sites, PV, 2012)
(30)      AUD 281 (Uterne, PV, single-axis tracking, 2011)
(31)      JPY 31,448 (Oita, PV?, Japan, to open March 2014)
(32)      USD 342 (Shams, Abu Dhabi, trough, to open early 2013)
(34)      USD 272 (Daggett, California, designed 2010)
(35)      GBP 148 (Wymeswold, UK, PV, March 2013)
(36)      USD 139 (South Georgia, PV, June 2014)
(37)      USD 169 (Antelope Valley, CdTe Pv, end 2015)
(38)      AUD 137 (Mugga Lane, PV, mid 2014)
(39)      AUD 163 (Coree, fixed PV, Feb 2015)
(40)      AUD 298 (Ferngrove Winery, July 2013)

Conclusion

You can compare results in the graphic below (click for a larger image), which expresses costs in USD/MWh at the exchange rates of 6 December 2013.   (Currencies deflated at 1.75% per annum, baseline date is end 2014.  Red is for solar thermal, blue for PV.  Filled-in circles denote completed projects, open circles denote announced projects.)

According to my methodology, the LCOE for the Ferngrove Winery project is not especially good.  It’s 83% higher than that for the large Coree project (number 39 on the list) announced in mid-2013, and 15% higher than the Kamberra Winery project (number 26 on the list) completed in mid-2012.

But Ferngrove had to pay only half the cost, which means the LCOE as they see it would be AUD 149 per MWh.  That would be economically worthwhile at present, and presumably will be much more so in the future when the world gets serious about climate change.

 

Wednesday, August 21, 2013

Cost of solar power (39)

Two days ago, I wrote about the Levelised Cost of Electricity (LCOE) for one of two recently-announced PV installations in the Australian Capital Territory.  Today I’ll estimate the LCOE for the second of the projects.

The ACT government is awarding these projects on the basis of bids into a reverse auction.  Proponents nominate the price at which they can deliver power; the ACT government provides the difference between the agreed tariffs and the price that that the retailers want.   I presume the ACT government retains federal government benefits associated with the Renewable Energy Certificates.

As I mentioned on Tuesday, RenewEconomy has a good story about the projects.  There were 15 bidders, and my expectation is that the prices bid were at cut-throat levels.

The OneSun Capital Solar Farm at Coree, about 30 kms west of Canberra is a project of Elementus Energy.  The peak output is 7 MW from 26,190 solar panels at fixed tilt, which will produce an estimated 11,900 MWh of electricity per year.  The cost of the project is reported as around AUD 17 million.  The agreed reverse auction price is AUD 186/MWh.

A completion date in 2015 is envisaged because there is a need for local network upgrades before the project can be finalised.  For the sake of my records, let me estimate the completion date as the end of February 2015.

Let me see how my estimate for the LCOE compares with the auction price.

I’ll analyse the LCOE using my standard assumptions:
 
 
  • there is no inflation,
  • taxation implications are neglected,
  • projects are funded entirely by debt,
  • all projects have the same interest rate (8%) and payback period (25 years), which means that the required rate of capital return is 9.4%,
  • all projects have the same annual maintenance and operating costs (2% of the total project cost), and
  • government subsidies are neglected.
 
For further commentary on my LCOE methodology, see posts on Real cost of coal-fired power, LEC – the accountant’s view, Cost of solar power (10) and (especially) Yet more on LEC.  Note that I am now using annual maintenance costs of 2% rather than 3% as in posts during 2011.
 
The results for the Coree project are as follows:
 
Cost per peak Watt              AUD 2.43/Wp
LCOE                                     AUD 163/MWh
 
The components of the LCOE are:
Capital           {0.094 × AUD 17×10^6}/{11,900 MWhr} = AUD 134/MWhr
O&M              {0.020 × AUD 17×10^6}/{11,900 MWhr} = AUD 29/MWhr
 
By way of comparison, LCOE figures (in appropriate currency per MWh) for all projects I’ve investigated are given below.  The number in brackets is the reference to the blog post, all of which appear in my index of posts with the title “Cost of solar power ([number])”:
 
(2)        AUD 183 (Nyngan, Australia, PV)
(3)        EUR 503 (Olmedilla, Spain, PV, 2008)
(3)        EUR 188 (Andasol I, Spain, trough, 2009)
(4)        AUD 236 (Greenough, Australia, PV)
(5)        AUD 397 (Solar Oasis, Australia, dish, 2014?)
(6)        USD 163 (Lazio, Italy, PV)
(7)        AUD 271 (Kogan Creek, Australia, CLFR pre-heat, 2012?)
(8)        USD 228 (New Mexico, CdTe thin film PV, 2011)
(9)        EUR 200 (Ibersol, Spain, trough, 2011)
(10)      USD 231 (Ivanpah, California, tower, 2013?)
(11)      CAD 409 (Stardale, Canada, PV, 2012)
(12)      USD 290 (Blythe, California, trough, 2012?)
(13)      AUD 285 (Solar Dawn, Australia, CLFR, 2013?)
(14)      AUD 263 (Moree Solar Farm, Australia, single-axis PV, 2013?)
(15)      EUR 350 (Lieberose, Germany, thin-film PV, 2009)
(16)      EUR 300 (Gemasolar, Spain, tower, 2011)
(17)      EUR 228 (Meuro, Germany, crystalline PV, 2012)
(18)      USD 204 (Crescent Dunes, USA, tower, 2013)
(19)      AUD 316 (University of Queensland, fixed PV, 2011)
(20)      EUR 241 (Ait Baha, Morocco, 1-axis solar thermal, 2012)
(21)      EUR 227 (Shivajinagar Sakri, India, PV, 2012)
(22)      JPY 36,076 (Kagoshima, Kyushu, Japan, PV, start July 2012)
(23)      AUD 249 (NEXTDC, Port Melbourne, PV, Q2 2012)
(24)      USD 319 (Maryland Solar Farm, thin-film PV, Q4 2012)
(25)      EUR 207 (GERO Solarpark, Germany, PV, May 2012)
(26)      AUD 259 (Kamberra Winery, Australia, PV, June 2012)
(27)      EUR 105 (Calera y Chozas, PV, Q4 2012)
(28)      AUD 205 (Nyngan and Broken Hill, thin film PV, end 2014?)
(29)      AUD 342 (City of Sydney, multiple sites, PV, 2012)
(30)      AUD 281 (Uterne, PV, single-axis tracking, 2011)
(31)      JPY 31,448 (Oita, PV?, Japan, to open March 2014)
(32)      USD 342 (Shams, Abu Dhabi, trough, to open early 2013)
(34)      USD 272 (Daggett, California, designed 2010)
(35)      GBP 148 (Wymeswold, UK, PV, March 2013)
(36)      USD 139 (South Georgia, PV, June 2014)
(37)      USD 169 (Antelope Valley, CdTe Pv, end 2015)
(38)      AUD 137 (Mugga Lane, PV, mid 2014)
(39)      AUD 163 (Coree, fixed PV, Feb 2015)
 
Conclusion
 
You can compare results in the graphic below (click for a larger image), which expresses costs in USD/MWh at the exchange rates of 20 August 2013.   (Currencies deflated at 1.75% per annum, baseline date is end 2014.  Red is for solar thermal, blue for PV.  Filled-in circles denote completed projects, non filled-in circles denote announced projects.)
 
According to my methodology, the LCOE for the Coree project is not as cut-throat as the LCOE for the Mugga Lane project, the co-winner in the ACT reverse auction.  Perhaps they have managed to incorporate a bit of profit in the deal?
 
My estimated LCOE (AUD 163/MWh) is to be compared with the reverse auction price, namely AUD 186/MWh.  The comparison is closer than that for the Mugga Lane project.
 
Overall, these two projects show the continuing trend towards cheaper PV.  I see this as excellent news and I look forward to the days when solar thermal power in Australia is able to give such competitive prices.  Of course, I also look forward, fervently, to the day when we no longer need or use fossil fuels to provide power.